Should minimum credit card age be raised?

Over recent years the debt mountain in the UK has been growing, and many people have found themselves in huge levels of debt, much of which has been attributed to credit card debt.

According to a debt management group in the UK the 18-20 age groups is now seeing increasing debt levels in relation to credit card spending, and this could lead to a lifetime of debt for many, as many of them will be making minimum repayments and will therefore end up paying off the card for years or even decades.

Often the 18-20 age group is made up of college leavers, and part of their first taste of freedom is the financial freedom of a credit card. Many consumers in this age group apply for a card more or less as soon as they hit eighteen, and after that the spending sprees begin. Of course there are those that are sensible with their credit card spending and use the card responsibly, but the rising number of consumers in this age group with problems debts suggests that many lose control of their spending very quickly.

Officials from the debt management agency are now calling for the minimum age for credit cards to be raised from 18 to 21. According to officials this will give the consumer more time to get used to management of finances after leaving college, and will also give them time to learn more about the pitfalls of debt and how it can affect their lives on a long term basis, which means that when they are eligible for a credit card they are more likely to be responsible with it.

According to one official:  "raising the legal age at which people have access to credit cards would provide a quick and effective solution."

However, with credit card companies still trying to make profits to make up for lost revenue on penalty charges it is unlikely that will cut out a portion of the market by raising the age limits.

Tom Smith
25th September 2007